A mareva injunction refers to a court order awarded in favour of the Claimant, which has the effect of freezing the Defendant’s assets, which can include both domestic and even international assets depending on the nature of the case.
This is done so as to prevent to Defendant from dissipating his assets in a manner that will frustrate the judgement.
For instance, a Defendant who realises that he has a weak case and will end up losing the lawsuit may decide to sell all of his properties and quickly transfer the monies inside his bank account into an offshore hidden bank account. If this is done, the Claimant may be unable to enforce the court order despite winning the lawsuit because the Defendant will have no more assets left.
If such a situation is suspected, the Claimant’s lawyer will usually advise to apply for a mareva injunction in court, before a final decision is made for the pending lawsuit. To successfully obtain a mareva injunction, the Claimant will need to show that he or she has a good arguable case against the Defendant and that there is a real risk of dissipation of assets.
Can you still apply for a Mareva Injunction if months, or even years, have passed throughout the court proceedings?
Is there a time limit as to when a mareva injunction application has to be made? A court trial is a lengthy process and may sometimes take up to years before it reaches trial and is concluded. Although the mere act of a delay will not immediately prevent the granting of a mareva injunction, there have been cases where the grant ofmareva injunctions were denied due to a delay inthe making of the application. A court will consider the various facts of each case before determining if the delay operates as a bar. One crucial factor is whether the delay prejudices the Defendant.
When might a delay be justified?
If the delay is not too significant, such as up to a month, it is less likely to lead to a refusal in a mareva injunction being granted. A delay may be justified if the Plaintiff has based their application for a mareva injunction on the basis of the Defendant’s attempt to sell his or her property and if the Plaintiff was only alerted to the risk of assets being dissipated upon realising the attempted sales, which in turn prompted the application for a mareva injunction.
A delay could also be explained due to the Plaintiff’s lack of proper knowledge and understanding that a certain transaction was an improper attempt by the Defendant to try and dissipate his or her assets.
There has even been a case where a delay of three years prior to thecommencement of a mareva injunction application was accepted by the court. This was found to be acceptable due to the lengthy investigation that was required to be carried out during those years, including the need for government to government assistance rendered in the investigation process.
Moreover, a delay will not operate as a bar to the mareva injunction if the Defendant is not disadvantaged by the delay. This is especially applicable in situations where the delay has actually benefited the Defendant since he or she will be able to continue enjoying the usage of the money during the period of delay. This is since, it is the Claimant who would be prejudiced by the delay.
When might a delay not be justified?
If a Claimant already has the knowledge or very strong reason to suspect that the Defendant is acting fraudulently and that the Defendant’s game will be nearly up since it is just going to be a matter of time before the truth gets uncovered, the Claimant must not delay making a Mareva injunction application to show that the Plaintiff is genuinely fearful of the Defendant dissipating his or her assets. Any unjustified delay resulting in a late Mareva injunction application may lead to the Courts refusing to grant the Mareva injunction.
Further, if there is no true urgency in making a Mareva injunction and the delay is inordinate without any reasonable explanation as to why there was such a delay, the court may also decide not to grant the Mareva injunction application in the absence of evidence of an emergency or urgency.
Ultimately, a court’s decision on whether to grant a Mareva injunction application that was delayed depends on many factors and the circumstances of the case itself. Your lawyer will be able to best advise you on your chances of succeeding at obtaining a Mareva injunction if there has been a delay.